Disaster Workforce Housing Tax Credits
In May 2019, Gov. Reynolds signed the Empower Rural Iowa Act, which provides incentives for broadband development and workforce housing in disaster-impacted areas of Iowa.
The Empower Rural Iowa Act allocated Workforce Housing Tax Credits for qualified housing projects in counties with a Presidential Disaster declaration. These state tax credits are designed to incent housing rehabilitation and development in communities that lost or can demonstrate a housing need as a result of a disaster.
- Projects may include single-family or multi-family new construction and rehabilitation, including upper story housing development
- Housing developers may receive:
- State of Iowa tax credit up to 20% of the investment related to the construction/rehabilitation. The credit is based upon the first $150,000 in new investment for each housing unit.
- Refund of the state sales and use taxes paid during construction.
- State tax credits are transferable and may be used for equity in the project.
- Maximum award for a project is $1 million.
- Project must include at least four single-family homes or at least one multi-family building containing three or more units or at least two upper story housing units.
- Total project costs may not exceed $200,000 per unit for new construction or $250,000 per unit for historic rehabilitation. Total project costs for projects under the Small Cities set aside may not exceed $215,000 per unit.
- Project budget must include local matching funds in an amount equal to at least $1,000 per housing unit in the project. Local matching funds may include local tax abatement, grants, reimbursements or other cash or cash equivalents.
- The housing project must be completed within three years from the date the project is awarded credits.
- Iowa Economic Development Authority (IEDA) will issue tax credits upon project completion. The actual amount of credits issued is based on final, documented project costs.
- Federal, state or local grants, tax credits, forgivable loans or other assistance not requiring repayment cannot be included for the purposes of calculating new investment.
- Counties receiving a Presidential Disaster declaration on or after March 12, 2019, and
- Individuals eligible for Individual Assistance through the Federal Emergency Management Agency (FEMA)
- 10 counties currently meet the criteria, and projects MUST be located in one of these counties: